Homeland Security Secretary Michael Chertoff told senators in a letter late Tuesday that the amendment, which makes a new program to stop businesses from hiring illegal workers less burdensome, "would be a serious step backwards in our enforcement effort."

In an angrily worded reply to Chertoff on Wednesday, the unlikely allies sponsoring the amendment dismissed his criticism as "erroneous and misleading," and defended their proposal as one that would improve a deeply flawed system.

Their amendment is one of a limited list of two dozen the Senate would consider adding to the immigration measure under a plan to revive the stalled bill before the July 4 recess.

Consumed with a debate on energy policy, the Senate is unlikely to turn back to the bill until early next week. When it does, skeptical senators in both parties will get the lion's share of the opportunities to revise it through amendments that could cut to the heart of the measure.

The proposal by Grassley, Baucus and Obama addresses the worker verification program, which is despised by both labor and business groups. Businesses fear it would wreak havoc with their ability to hire workers and impose exorbitant costs. Labor organizations worry it could result in discrimination against workers.

The same interests are eagerly pushing for the broader immigration overhaul, which would legalize some 12 million unlawful immigrants and create a new temporary guest worker program.

Lessening burden on employersThe proposal would ease the measure's strict requirements for employers to verify that all their workers are legal, instead allowing businesses to check only the identities of new employees and those existing ones who the Department of Homeland Security has reason to believe are unlawful.

It would strip a requirement that employees present a federally standardized "REAL ID," instead allowing them to produce other driver's license or identity cards. Workers denied a job under the system could appeal to Department of Homeland Security for lost wages.

In their letter to the Homeland Security Secretary, the three senators wrote, "We strongly support creating an effective, mandatory employment verification system for all employers to verify the legal status of their workers. But the design, implementation, and oversight of the system as proposed in the pending immigration bill are flawed in several respects."

Meanwhile, a paper released Wednesday by the White House's Council of Economic Advisers made the case that immigration has had mostly a positive economic impact on the United States.

Not replacing U.S. workersFor the most part, immigrant workers find employment that tends to complement — not replace — the jobs held by workers born in the United States, the paper says. On average, native-born U.S. workers' wages have been boosted as immigrant workers have helped to expand the nation's overall economic pie and thus its wealth by billions of dollars a year, the paper says.

The paper acknowledges the challenges of U.S.-born workers with little education, but adds that "it is safe to conclude that immigration is not a central cause of those difficulties, nor is reducing immigration a well-targeted way to help these low-wage natives."

The report came as a coalition of labor groups announced their vehement opposition to the immigration bill, denouncing it as "anti-worker." Those unions argue that the temporary worker program will create an underclass of guest laborers who could be abused by the employers and denied a fair chance at becoming citizens.